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The Canadian Dollar (CAD) found room on the high side on Friday, climbing nearly 0.9% and locking in a second straight week of firm gains for the Loonie. The CAD has gained nearly 2.2% bottom-to-top against the US Dollar (USD) since hitting seven-month lows in early November.

Canadian labor data came in broadly stronger than expected in November, with the Canadian economy adding far more jobs than expected. The Canadian Unemployment Rate tumbled to its lowest level since August 2024. 

US Personal Consumption Expenditures Price Index (PCE) inflation data from September also came in slightly better than expected, helping to keep broad-market risk appetite on the high side as investors expect a third straight Federal Reserve (Fed) rate cut in December. The Greenback is swooning across the board on Friday, providing further support for Loonie bulls.

Daily digest market movers: Canadian employment figures flaunt expectations, boost Loonie

• The Canadian Dollar rose 0.85% against the US Dollar on Friday, pushing the Loonie into fresh ten-week highs against the Greenback.
• Loonie strength combined with a waffling US Dollar has pushed the USD/CAD pair back down from the 1.4000 handle, and price action is now back on the bearish side of the 200-day Exponential Moving Average (EMA) near 1.3925.
• The Canadian Unemployment Rate sank to its lowest levels in nearly a year, falling to 6.5%.
• Canadian Net Change in Employment showed 53.6K net new job gains in November, well above the forecast 5K contraction.
• Key US PCE inflation came in cooler than expected and US consumer sentiment trackers also rebounded more than expected, cementing market hopes for a third straight Federal Reserve (Fed) interest rate cut on December 10.

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Canadian Dollar price forecast

Friday’s strong showing for the Canadian Dollar has pushed the USD/CAD deeper into bear country. Price action is now on the low side of the 200-day EMA. Although technical oscillators are beginning to flash warning signs of oversold conditions, a bullish return to the mean is unlikely to reclaim the 1.4000 without a structural shift in market sentiment.

USD/CAD daily chart

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